What do I do if my employer just started offering legal insurance as a benefit for this year’s Open Enrollment? How do I decide if I should use this service?

First, remember that insurance is to cover events that you cannot. The company offering insurance products are in it to make a profit, so on the whole all the purchasers lose. But if you can’t cover the cost of the event, that’s also a loss. Can you afford to lose? In the case of homeowners insurance, auto insurance, and health insurance, most of us agree that we can’t afford to go without insurance, the probability or the consequence (or the legal requirements) are too high. On the other end of the spectrum are the slews of warranties and extended warranties that all the companies want to sell you – for your television set, for your washing machine, for your 6 year old car, you get the picture. For these, the warranty cost is non-trivial, the coverage periods are often still too short, and the probability of events in that period is often low, combining to make this type of insurance not worthwhile.

Second, assess what your needs might be. For the case of newly offered legal insurance, read the packet. See what is covered that you actually expect to use, or is likely enough that you’re worried about whether you can pay for it. If you’re doing anything at all considered contrary to the interests of your employer (including being a business owner by being a landlord renting out a prior home to tenants), nothing in that realm is likely covered since this is an employer-offered benefit. Therefore make sure you’re reading the documentation for your company’s implementation of the plan not generally available documentation out on the internet. And just like in medicine, there are such things as pre-existing conditions, and those likely aren’t covered either. Also paralleling medicine, there are in-network and out of network providers.

Third, see what the level of coverage is for those services. Realize that most of us don’t feel comfortable reading a summary plan description or plan documentation for medical coverage, and knowing exactly what that would mean for coverage of some new condition, despite utilizing other medical services multiple times a year (and at least in this town, being involved in the industry). This is documentation written by lawyers in support of lawyers, in a field many of us have no professional experience in, and no or little personal experience.

Fourth, are there providers in your area? You can likely call an 800 number for the legal insurance company in question, provide your zip code, and have a document of “nearby” providers emailed to you. What is the distribution of expertise of the providers in your area? Unless you live in a large metropolitan area, likely not all areas of expertise are nearby, and even those represented may only be covered by one provider (who may be too busy when your need arises).

Fifth, just like any product you would buy, go look for reviews of this service.

Ask yourself:

• Do you really understand it?
• Does it provide services of value to you?
• Will the underlying providers for areas of expertise you need, be available when and where you need them?
• Is it cost effective?
• Is the company reputable?

Other thoughts: If you need to do a will + living will + financial power of attorney + health care power of attorney, this insurance might be a good way to do it.  Or if you see anything else on that list in the Summary Plan Description that you know you plan to do in 2020, again this type of insurance might be a good way to do it. 

Otherwise, between coverage type, and cost, and probabilities, consider an alternative if you’re concerned with some varieties of legal issues – consider an umbrella insurance policy.